TL/DR –
The Biden administration has implemented The Inflation Reduction Act, which has dramatically reduced healthcare expenses for seniors in the U.S., including the price of prescription drugs. The act has capped out-of-pocket prescriptions at $3,500 in 2023, which further reduced to a maximum of $2,000 in 2024, and made important vaccines like the shingles vaccine free for seniors. The legislation has been funded through a 15% minimum corporate tax imposed on companies with an average income that exceeds $1 billion.
Lower Healthcare Costs for Seniors Thanks to Inflation Reduction Act
The Inflation Reduction Act is significantly lowering healthcare expenses for seniors in the U.S., especially for those battling serious diseases such as cancer. Previously, several Americans on Medicare spent more than $14,000 annually on blood cancer drugs and over $10,000 on ovarian cancer medicines. However, the situation has dramatically changed.
Following the Biden administration’s decision in 2023 to cap out-of-pocket prescriptions at $3,500, in 2024, the cap was further reduced to a maximum of $2,000. According to President Biden, this will be a lifesaver for many families.
Also, the shingles vaccine, often skipped by seniors due to its cost, is now free. Starting from last year, Medicare prescription drug plans have eliminated the cost of the vaccine, which used to range between $100 and $200.
Consumer Victories and Lower Medicare Premiums
Another victory for consumers battling diabetes is the decision to cap the cost of insulin at $35 per month. In addition, Medicare has lowered the premium for Part B, which covers outpatient visits, saving an average of $800 per year for 15 million Americans, as per the US Department of Health and Human Services.
Last year, Medicare started using its large patient pool to negotiate fair drug prices, refusing to accept the exorbitant prices set by pharmaceutical companies, and began negotiations on ten of the most commonly used and expensive drugs, which include Eliquis, Jardiance, and Xarelto.
Cutting Costs and Paying for Savings
Lowering prescription drug costs doesn’t only benefit seniors financially. It also helps in reducing federal budget deficits by hundreds of billions of dollars. The government offsets these cost savings by ensuring the largest corporations in America pay their fair share of federal taxes.
Starting in 2023, U.S. corporations are required to pay a minimum corporate tax of 15 percent. The new measure in the Inflation Reduction Act, the Corporate Alternative Minimum Tax (CAMT), imposes a 15% minimum tax for corporations with an income exceeding $1 billion.
For years, the escalating healthcare costs have been a major concern. However, the last three years have seen several positive developments.
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